Table of Contents
Issues in the Market
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- Key issues
- Abbreviations
Insights and Opportunities
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- Tap into the non-savers
- Comfort through knowledge
- The adviser interface
Market in Brief
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- The market itself is vast and varied
- Challenges for providers of retirement savings and investment vehicles
- Opportunities exist
Fast Forward Trends
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- The CornerShop Bank
- Definition
- Context
- What next?
- The Over-Optioned
- Definition
- Context
- What next?
- The Nomadic Explorer
- Definition
- Context
- What next?
Broader Market Environment
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- Key points
- Living longer and the retiring Baby Boomers
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- Figure 1: Life-expectancy at age 60, by gender, 1981-2051
- Figure 2: Population growth projections, by age, 2004-29
- The change in asset holdings
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- Figure 3: Holdings, by asset class, 1996-2006
- Undersaving and Replacement Rate
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- Figure 4: Suggested retirement income as a percentage of working income, 2006
- Stock market continues to be healthy
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- Figure 5: FTSE 100 Index preformance, 1985-2005
- Personal disposable income trends upwards
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- Figure 6: Personal disposable income forecast, 1989-2011
- Lending rate leads decisions
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- Figure 7: Bank of England base rate, 1977-2006
- Investor illiteracy, apathy and mistrust
- Ignorance is bliss?
- Understanding savings, investment and retirement needs
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- Figure 8: The compounding effects of investment growth, 2007-36
- Scope for online learning
- The struggle to create a healthy retirement income
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- Figure 9: Pension savings converted to annuity income, 2007-36
- Signs of greater awareness
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- Figure 10: Awareness of the subject of personal finance, 2007
- Economic backdrop
Internal Market Environment
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- Key points
- Psychological barriers
- 2012 – a pensions revolution
- Threats and opportunities for providers
- Over a third of those in work eligible for the NPSS
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- Figure 11: Breakdown of those eligible for enrolment in the NPSS, 2006
- Pensions options for consumers
- The state pension
- State second pension (S2P)
- Occupational or company pension
- Personal pension
- Stakeholder pension
- Group personal pension (GPP)
- Additional voluntary contributions (AVC)
- Freestanding additional voluntary contributions(FSAVCs)
- Self-Invested Personal Pension (SIPP)
- Tax benefits
- Contribution tax relief
- Returns relief
- Lump sum relief
- ISA tax relief
- Pension reform
- Defined benefits decline
Competitive Context
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- Key points
- Buy-to-let (BTL)
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- Figure 12: Growth in the number of outstanding buy-to-let mortgages, 1998-2006
- Figure 13: Growth in the average price of a home in the UK, 1993-2006
- Equity release
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- Figure 14: Number of equity release plans in force at year end, 2003-06
- Individual Savings Accounts (ISAs)
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- Figure 15: Number and value of ISAs subscribed, 2001/02-2005/06
- Equity and bond investments
- Own business
- Inheritance
- Engaging the consumer
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- Depolarisation
- Fidelity, Standard Life, Cofunds and their investment supermarkets
- Standard Life looks to build share
- Personal planning tools
- Group SIPPs
- IFAs have new source for leads
- The SIPP fight
- 5 for life
Trade Perspective
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- Technology and intermediaries
- Product opportunities
- Regulation
- Challenges and the future
Market Size and Forecast
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- Key points
- Context
- Collective investments and pensions
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- Figure 16: Summary of new business premiums, 2002-07
- Buy-to-let mortgages
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- Figure 17: Number and value of buy-to-let mortgages outstanding, 1999-2006
- Figure 18: Number and value of buy-to-let sales, 1999-2006
- Figure 19: Forecast of new buy-to-let mortgages, 2006-11
Market Share
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- Key points
- Pensions
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- Figure 20: Top ten pension providers in the UK, 2005
- Figure 21: Top individual pension providers, 2005
- Figure 22: Top other pension providers, 2005
- Halifax leads the way in the ISA market
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- Figure 23: Top cash ISA providers, 2007
- Buy-to-let
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- Figure 24: Top buy-to-let mortgage providers, 2005 and 2006
- Market make-up
Companies and Products
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- Scottish Widows
- Standard Life
- Aviva
- AXA
- AEGON Scottish Equitable
- Norwich Union
- Legal & General
Brand Communication and Promotion
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- Key points
- Public is wary of financial services advertising
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- Figure 25: Interest in financial services advertising, March 2007
- Figure 26: Adspend on pensions, by type and related products, 2002/03-2006/07
- Print remains the preferred media channel for pension promotions
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- Figure 27: Pension adspend, by channel, 2006/07
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- Figure 28: Annual and cumulative adspend, by pension providers, 2002/03-2006/07
- Re-emphasising ISAs?
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- Figure 29: Annual and cumulative adspend, by ISA type, 2002/03-2006/07
- Rebound in BTL adspend
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- Figure 30: Adspend on buy-to-let mortgages, 2002/03-2006/07
Channels to Market
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- Key points
- The Independent Financial Adviser (IFA)
- Consolidation in the market
- Three key channels
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- Figure 31: Regular-premium individual pension business, 2002-06
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- Figure 32: Regular-premium group pension business, 2002-06
- Equity release and buy-to-let
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- Figure 33: Distribution channels used by the top ten buy-to-let lenders, 2006
Consumer Financial Activity
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- About the Financial Activity Bulletin
- Expected activity picks up
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- Figure 34: Expected financial activity – savings, investment, borrowing and debt repayment, December 2005-March 2007
- Much greater emphasis on saving than spending
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- Figure 35: UK savings and spending indices, January 2001-March 2007
- Activity remains subdued across most demographic segments
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- Figure 36: Expected financial activity over the next six months, by gender, age, socio-economic group, household income and working status, March 2007
- Placing a cash deposit and saving in an ISA are the top activities
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- Figure 37: Top five financial activities planned in the next six months, March 2006-March 2007
- Identifying the main financial services providers
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- Figure 38: Saving, investment and lending: market sizes, by expected customer demand and brand leaders, March 2007
- Nationwide tops the activity chart
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- Figure 39: Activity levels of main financial services providers’ customer bases, March 2007
The Consumer – Retirement Saving
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- Key points
- Huge gaps in pension ownership still evident
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- Figure 40: Pension ownership, March 2007
- Half of population are not contributing to a pension
- Scope for female-friendly options
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- Figure 41: Pension ownership, by gender and socio-economic group, March 2007
- Implications and opportunities
- Low ownership among the young…
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- Figure 42: Pension ownership, by age, March 2007
- …but the NPSS should change that
- Implications and opportunities
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- Figure 43: Pension ownership, by marital status and lifestage, March 2007
- Implications and opportunities
- Cash the key limiting factor
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- Figure 44: Main reasons for not contributing to a pension, March 2007
- Affordability and Apathy
- Implications and opportunities
- Affordability still an issue for the better off
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- Figure 45: Main reason for not contributing to a pension, by gender and socio-economic group, March 2007
- Implications and opportunities
- The gender divide
- Implications and opportunities
- Apathy and property – the key trends among younger non-savers
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- Figure 46: Main reason for not contributing to a pension, by age, March 2007
- Implications and opportunities
- Cohabiting, but without the savings habit
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- Figure 47: Main reason for not contributing to a pension, by marital status and lifestage, March 2007
- Implications and opportunities
- Cash-strapped families can’t afford to worry about the future
- Implications and opportunities
The Consumer – Increasing Savings Activity
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- Key points
- Plenty of reasons for saving – so why aren’t they?
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- Figure 48: Factors that would encourage consumers to save more for retirement, March 2007
- Security is the primary motivator towards greater saving
- Necessity, not luxury
- Implications and opportunities
- ABs look to an early end to the working life
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- Figure 49: Which of these factors would encourage you to save more for retirement, by gender and socio-economic group, March 2007
- Implications and opportunities
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- Figure 50: Which of these factors would encourage you to save more for retirement, by age, March 2007
- Promoting the family angle
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- Figure 51: Which of these factors would encourage you to save more for retirement, by marital status and lifestage, March 2007
- Implications and opportunities
- Is targeting the non-savers a non-starter?
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- Figure 52: Factors that would encourage consumers to save more for retirement, by pension provision, March 2007
- Implications and opportunities
- Taking the easy option
- The case for tax reform
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- Figure 53: Attitudes towards pensions and retirement, March 2007
- Negative attitudes towards the industry continue
- Implications and opportunities
- ABs don’t believe the hype
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- Figure 54: Attitudes towards pensions and retirement, by gender and socio-economic group, March 2007
- Implications and opportunities
- How to engage younger consumers?
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- Figure 55: Attitudes towards pensions and retirement, by age, March 2007
- Implications and opportunities
- Time for a period of consolidation?
- Implications and opportunities
- Contrasting attitudes among the lifestages
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- Figure 56: Attitudes towards pensions and retirement, by marital status and lifestage, March 2007
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- Figure 57: Attitudes towards pensions, by pension ownership, March 2007
- Implications and opportunities
The Consumer – Targeting and Marketing Opportunities
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- Key points:
- Target Groups
- 1 Uninvolved
- 2 Seeking Alternatives
- 3 Pension Faithful
- 4 Wary and Worried
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- Figure 58: Cluster group typologies, by statements on pension provision, March 2007
- Early retirement a key motivation for involved investors
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- Figure 59: Target group typologies, by statements on factors that would encourage people to save or invest more money into a pension, March 2007
- Demographic breakdown of the target groups
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- Figure 60: Target group typologies, by gender, age, socio-economic group, lifestage, household income, tenure, working status, ACORN categories and commercial TV viewing, March 2007
- Barriers to contributing to a pension
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- Figure 61: Main reasons for not currently contributing to a pension, March 2007
- Early retirement a key ambition
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- Figure 62: Factors that would encourage people to save or invest more money into a pension, March 2007
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